3 Reasons The Price Of Bitcoin Can Suddenly Move To A New Range Of $ 50,000 To $ 65,000
Analyst Willie Wu identifies three blockchain indicators that track the flow of Bitcoin tokens through wallets, each illustrating why the price of a reference cryptocurrency could skyrocket.
The combination of several indicators for monitoring the Bitcoin chain (BTC) will continue to increase the price of the benchmark cryptocurrency in 2021, predicts the popular analyst Willie Wu.
In his recent newsletter, a market researcher wrote that he expects bitcoin prices to hit the $ 50,000 to $ 65,000 range over the next few sessions. His comments came as BTC / USD recovered its three-month high above $ 42,600 just days after falling below $ 30,000, the psychological support level.
“My expectations are similar to those of BTC at $ 20,000, the all-time high in January, when the price approaches the $ 40,000-42,000 limit for a few days (2 weeks maximum), exhausting sellers, and then more a rapid increase to $ 50,000, ”Wu said.
“The next major consolidation tranche is between $ 50,000 and $ 65,000.”
Bitcoin Daily Chart (BTC / USD)
Bitcoin supply crisis
Bitcoin price rose in July amid positive comments from Tesla’s Elon Musk, Twitter’s Jack Dorsey and Ark Invest’s Katy Wood. The cryptocurrency also rose after rumors that global retail giant Amazon would start accepting it as payment, which the company later denied.
Meanwhile, the rise in bitcoin prices to $ 42,600 also came just after Federal Reserve Chairman Jerome Powell acknowledged the possibility of intermediate inflationary shocks at a press conference last Wednesday. In particular, bulls in the cryptocurrency market are using Bitcoin as a hedge against rising consumer prices.
Notably, the period of recovery in bitcoin prices below $ 30,000 coincided with a growing liquid supply shock. Specifically, Bitcoin was taken off the stock exchanges, which Wu suggested was due to the fact that powerful holders blocked them for long-term investments.
Bitcoin Liquid Feed Shock Oscillator
“To date, the Liquid Supply Shock is stable at $ 55,000,” the analyst wrote on August 1, highlighting the large gap between available supply and current Bitcoin prices.
“Despite a strong 44% rally in less than 2 weeks, we are still in the discount zone for Bitcoin.”
China’s ban on cryptocurrency activity in May played a pivotal role in pushing bitcoin prices down this summer. The move severely damaged the regional crypto mining industry, which accounted for more than half of the world’s bitcoin production.
In June, Glassnode announced that miners either closed their platform To comply with the new law, they either moved their operations outside of China, which led to additional costs for maintaining production.
The data mining platform also noted that miners are likely to liquidate some of their bitcoin holdings to cover the additional costs. But it turned out that the trend of net accumulation of BTC by miners changed in May, which indicates surrender.
But as Wu pointed out, miners resumed accumulating bitcoins in July. He cited the popular Bitcoin Hash Ribbon metric that tracks network expansion and hash rate loss, noting that it is recovering for the first time since China’s ban.
Bitcoin Hash vs Price
“The tape rescue events mark the end of the sale of miners (which they do when they are kicked out of business),” Wu wrote.
“Usually a band rally creates the basis for a monthly period of bullish price movement. This indicator did an excellent job of detecting the lowest price. ”
Peaks of whale activity
Whales bought a lot last week, Wu added, pointing to the rise in bitcoin prices from $ 29,300 to over $ 42,600.
Whales are usually organizations that store over 1,000 BTC in their bitcoin addresses. While they do not solely affect market direction, their purchase in conjunction with relatively small bitcoin investors indicates a strongly bullish scenario.
The analyst noted that all groups of investors, large or small, bought Bitcoin for nine days in a row, which he had not even seen during the existence of the cryptocurrency.
Bitcoin purchases by whales are usually accompanied by significant price jumps.
“The current purchases of all cohorts are optimistic,” Wu said. “When everyone buys, who is the seller? Sellers are traders. Coins sold by traders reduce speculative stocks on spot exchanges. “
Yashu Gola, Cointelegraph
Yashu Gola is a financial analyst based in Mumbai who has covered the cryptocurrency industry since 2014. Prior to his journalistic career, Yashu was a security analyst at Premiershield and a writer at Appin Technology.
The opinions expressed here are solely those of the author and do not necessarily reflect the views of Forex Quebec. Every investment and trading move carries a risk, so you must do your own research when making a decision.
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